Withholding Medicaid funds from a state

The Centers for Medicare & Medicaid Services (CMS) is deferring approximately $867.5 million in federal Medicaid payments to California and $199 million to Minnesota, the agency announced in a press release. The deferrals come “after focused financial reviews identified claims that require additional review” before federal matching funds are released. Both states will have the opportunity to provide documentation showing the claims meet federal Medicaid requirements, the release said.

“If the documentation [the state provides] supports the claims, the funds will move forward,” Dan Brillman, director of the Center for Medicaid and CHIP Services, said at a press conference at HHS headquarters in Washington. “If not, taxpayers should not be paying for these services or these claims … Our objective is to make sure that every Medicaid dollar reaches those who need it.“

Source: MedpageToday.com

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Sounds logical, don’t pay for unsubstantiated claims, but it’s not that simple … as is the case with much of the Trump administration’s approach- taking action without considering consequences.

“taxpayers should not be paying” ❓❓❓

If CMS withholds funds …

The state pays out of its own funds, using state general revenue or reserves to cover the gap left by the missing federal match, so that beneficiaries keep getting care and providers keep getting paid. If the state can’t or won’t front the money, the practical fallout lands on providers (hospitals, nursing homes, home health agencies, etc.), who may see delayed reimbursement, and ultimately on enrollees, who can face disruptions in access if providers pull back from the program.

When CMS withholds or defers the federal share, the state doesn’t get to stop paying claims — it’s still legally obligated to pay providers under its state Medicaid plan. 

Of course, if the state pays, the money must come from taxpayers in the state…. so some taxpayers are paying🥵